BUILDING AND KEEPING A CLIENT REFERRAL BASE

by Joel A. Rose

Referrals from former and current clients, and friendly
third parties, are among the most desirable sources of new business. This article
describes several approaches for developing and maintaining a referral base as
an integral part of a firm's business development and client relations program.

A referral base is the process by which other
individuals refer legal work or clients to an attorney. The most tangible benefit
of a referral network is the generation of legal work that will contribute to
your firm's revenue. A secondary benefit that produces personal and professional
satisfaction, is the recommendation of your firm from another individual who
has confidence in your abilities. In either case, since the client has been
referred by a friend or an individual in a position of trust, the client relationship
often begins with a greater degree of confidence.

It has been the author's experience that referrals
generally occur because of the efforts of the attorney who is receiving such
referrals. You should not expect such referrals to "fall into your lap." You
must initiate certain actions to try to make them occur.

There are two kinds of referral networks. One
is an attorney referral source. The other is referral from clients or other
"friendly third parties" who are not attorneys. Both types of referral networks
are important. However, one type may be more important for developing a particular
practice.

Attorney Referrals

Many attorneys refer work to other attorneys
because of the specialty nature of work that needs to be performed or because
of a conflict of interest. To be in a position to receive such referrals, an
attorney should develop an expertise in one or more areas of legal work and
become recognized by other attorneys as being especially skilled in those areas.
It is also necessary to inform attorneys who may be referral sources that you
have such expertise and that you are interested in accepting referrals in these
areas. To the extent you are interested in receiving referrals, you should get
to know attorneys likely to be in a position to refer such matters. This may
be accomplished by participating in bar associations, by writing on case law
or procedural issues, by speaking at CLE programs and by maintaining an active
role in selected committees. Having your firm listed in legal directories may
also help.

Since attorneys refer matters to other lawyers
when they are confronted with a conflict of interest, it is probable that larger
firms will have such conflicts of interest more frequently than smaller firms.
Thus, the potential referral sources for conflict of interest cases will likely
be different than for cases the referring attorney does not wish to handle because
of lack of expertise. Once an attorney referral base has been established, it
is important to maintain that network. Several points need to be remembered
in this regard. First, referrals resulting from a conflict of interest will
often involve a client who will be returning to the referring attorney for other
matters. Second, remember that there is another attorney/client relationship
involved. Third, providing good service to the referred client is an excellent
way to help reinforce the referral network since the reputation and judgement
of the referral sources, as well as your own reputation, is on the line with
a referral client. Further, you should make every effort to ensure that the
referred client is satisfied. This may mean having to do more than "just handling
the case in a competent manner." Dissatisfied clients will invariably report
back to the referral source making it difficult for you to receive future referrals
from that source. Fourth, the attorney working with a referred client should
be mindful of not "showing up" the referral source. Also, never give the impression
to that client or to the referring attorney that you are trying to "pirate"
that client. Fifth, the attorney handling the referral should maintain as much
communication as possible with the referral source. Doing these things will
keep the referring attorney happy and result in additional referrals.

Non-Attorney Referrals/"Friendly Third Parties"

The first step in developing a non-attorney
referral source is to evaluate your own practice to determine what type of referrals
you are able and willing to accept. The next step is to identify potential referral
sources. The best referral sources will have significant and repetitive contact
with individuals who need your legal services. These sources should be able
to identify the needs of potential clients and have their trust in order to
make a referral. Identifying friendly third parties and cultivating their confidence
is time consuming. Patience and perseverance is essential.

The initial contact with potential non-lawyer
referral sources may be made by joining a professional, trade, social, civic,
service or religious organization. You may be recognized by maintaining an active
profile on influential committees. It is essential that you do a superior job
on any committee or project assigned. This will provide an excellent opportunity
to get to know and impress those friendly third parties who may be potential
referral sources. A few years ago, the author was consulting with a large firm
that co-sponsored, with other patrons, the Nutcracker Suite Ballet on public
service television during the Christmas season. The managing partner of the
law firm indicated that as one of the patrons of the telecast his firm was invited
to several cocktail receptions during the year sponsored by the television station.
These receptions were attended by executives of other professional, service
and corporate organizations. Through a well conceived and executed plan, the
managing partner and particular members of the firm personalized and reinforced
their relationships with these executives with the expectation of developing
a client or referral base.

By analyzing and communicating with well positioned
friendly third parties, you may be invited to speak before professional or other
organizations on timely subjects in which you have expertise, or to write for
one of their publications. On many occasions, you may already have established
a relationship with a friendly third party who is a current or prior client.

Once these referral sources have been identified,
you should develop and reinforce a personal relationship with these friendly
third parties who come in contact with potential clients. Notwithstanding the
desire of attorneys to foster a personalized relationship, you must be careful
to insure that the most appropriate individual in your firm is selected to do
this. The personal chemistry that allows a natural rapport between you and the
potential referral source is essential.

Recently, the author was called upon to work
with a firm that had developed a very successful worker's compensation practice
through the close personal relationship of a partner with the shop steward of
a union in a plant of a corporation that manufactured heavy equipment. Injuries
to workers were frequent and usually serious. To reinforce his personal relationship
with the shop steward, the partner made it a practice to occasionally visit
a neighborhood bar after hours to have a few beers with the steward and other
workers. Quite unexpectedly the partner became seriously ill and was unable
to continue to work. The firm's managing partner suggested to another partner
in the workers' compensation department that he continue the relationship. Although
the second partner attempted to befriend the shop steward, it was readily apparent
that the rapport between the two was strained. Within a year after the first
partner's illness, the referrals to the firm from the shop steward dried up.

Maintaining the Referral Network

Once referrals from non-attorney sources are
received, it is important that you work to maintain that base. Providing good
service to referred clients and keeping them happy will reflect well on the
friendly third party and encourage them to make additional referrals. Further,
courtesy should be extended to the referral source by communicating with them
about the status of the referred matter. If the referral source is involved
in the matter for the client, keep them informed and ask for their input. You
need to satisfy both the client and the referral source in order to continue
to receive referrals.

Maintain contact with referral sources even
when you are not working on a referred matter. This keeps your name in front
of that source for the next referral. A phone call, letter or lunch is easy
to do and can be valuable in maintaining and reinforcing your relationship.
You can also offer to provide assistance or input to the referral source on
matters in which you are not directly involved. Non-lawyer friendly third parties
like to have an attorney as a resource and will likely give that resource person
more referrals.

Set monthly goals for the number of referral
sources contacted. Allocate time for this important activity. Make it part of
your regular routine.

Many referral sources will also expect referrals
from you. This is usual and can help build a stronger relationship with the
referral source. You must always be sure it is in the best interest of your
client to make such a referral. If you work with referral sources who are competent,
quality people, you will have no worries in accepting or making referrals to
them.

In some cases, you may disagree with the advice
or direction a referral source is giving to a mutual client. Contact the referral
source to discuss any problems which you have, prior to discussing them with
the client. The problem may be a misunderstanding and can be corrected. If any
such problem cannot be resolved, you have a duty to explain your differences
to the client.

Satisfied Client as a Referral Source

Most satisfied clients are willing to make referrals.
The time immediately following the successful completion of a legal matter is
when to ask that client for a referral. It is strongly recommended that you
ask the client for a referral, prior to using that client's name. Few clients
like to make referrals without their permission.

Conclusion

The development and maintenance of a referral
network is an excellent technique for marketing your practice and obtaining
legal business from attorney and non-attorney sources. A successful referral
base will require work and take time to establish. You must have patience and
persistence. Legal matters are referred everyday. Most referrals go to those
attorneys who have worked to establish and maintain their referral network.